After a roughly four-hour closed door session Tuesday night, the Providence City Council voted to hire lawyer Max Wistow to take developer Arnold “Buff” Chace to court over tax breaks he received for downtown properties.
Chace made a deal with the administration of former mayor Jorge Elorza to save himself more than $42 million in taxes over a 30-year period by including some affordable housing in his downtown apartment buildings. At issue is whether the deal was made legally, given there was no oversight from other branches of city government.
[Disclaimer: Arnold “Buff” Chace is a financial supporter of The Public’s Radio.]
“As far as the council is concerned this should be wiped out because the lawyers that entered into it had no authority to do so,” Wistow said.
Wistow estimates Chace has already saved millions off the deal and is asking to wrestle back those taxes on behalf of the city council.
Council member John Goncalves represents the downtown area in which the 10 buildings Chace received the tax breaks on lie. He says he was on the council when the deal was made and that it should have been run by him. He applauded the decision to hire Wistow.
“We need to claw back every single dollar that we can and I think that’s what the outside counsel is going to do,” Goncalves said.
If he is successful, Wistow will make half of the money the city council receives back from Chace, not to exceed $1.4 million dollars. If he’s unsuccessful, he gets nothing.
Wistow says the next steps are to file a motion with the court to join an already open case between Buff Chace’s LLCs and the City of Providence.
A spokesperson for Buff Chace’s attorney wrote in an emailed press statement that they believe this will slow down development in Providence.
“We regret that it also now appears as though the Council is seeking to reverse a legal judgement designed to bolster additional, much-needed housing which clearly will have a chilling effect on all such initiatives contemplated throughout Providence – slowing the development of housing across the city,” the press release said.
Mayor Brett Smiley’s administration is also opposed to the council’s hiring of attorneys, saying it preferred to negotiate a new deal directly with the developer, rather than through the courts.
“We provided the City Council a resolution that addresses the challenges of the old settlement and claws back 30% of the tax subsidy provided,” Smiley said in an emailed statement. “The City Council has still not shared external counsel’s proposal with the Administration, which does not allow us to assess its likelihood of success.”
This is not the only current legal battle for Chace, who is also feuding with cousins over a deceased family member’s will.
